HomeMy WebLinkAboutR-2014-049 Settlement of Lawsuit with Western Peterbilt, Inc. RESOLUTION NO. R- 2014 -049
A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute
a Settlement and Release Agreement entered into by the City of Yakima
and Western Peterbilt to resolve and settle the lawsuit brought by the City
of Yakima against Western Peterbilt, Inc.
WHEREAS, on October 29, 2012, a lawsuit was filed by the City of Yakima in Yakima
County Superior Court No. 12 -2- 03732 -8 entitled City of Yakima v. Western Peterbilt, Inc.; and
WHEREAS, the lawsuit arises out of a fire on April 28, 2011 that destroyed a refuse
truck that the City purchased from Western Peterbilt, Inc. in June 2009; and
WHEREAS, the City's property insurer Affiliated FM Insurance Company ( "Affiliated
FM ") paid the City $130,011 following the fire, and the City had a $100,000 insurance
deductible; and
WHEREAS, the lawsuit was an effort for the City to recover its $100,000 deductible and
for Affiliated FM to recover the amount it had paid the City, and all attorney fees for the lawsuit
were paid by Affiliated FM and not by the City; and
WHEREAS, on December 17, 2013, the Court granted the City's Motion for Summary
Judgment on Liability; and
WHEREAS, the City has engaged in discussions with Western Peterbilt, Inc. for the
resolution of the lawsuit through negotiation and settlement and the parties have worked
together to mutually resolve the issues; and
WHEREAS, through negotiation, the settlement will resolve all claims in the matter,
subject to the approval of the Yakima City Council, and the settlement proceeds of $245,000
will be allocated between the City, which will receive $98,477.02, and its insurer Affiliated FM,
which will receive $142,981.17; and
WHEREAS, the City Council of the City of Yakima deems it to be in the interest of the
City to authorize the City Manager to execute the attached Settlement and Release Agreement
to resolve and conclude the lawsuit; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is authorized to sign the attached Settlement
Agreement entered into by the City of Yakima and Western Peterbilt, Inc to resolve and settle
the lawsuit brought by the City against Western Peterbilt, Inc., which involves a settlement
payment by Western Peterbilt of $245,000, part of which will be allocated to the City of Yakima
and part to Affiliated FM.
ADOPTED BY THE CITY COUNCIL this 1 day of April, 2014.
0 I
ATTEST:
�P .. ._ � . icah Cawley, yor
•
City Clerk ' � b, � ` PgZ�
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (hereafter the "Agreement ") is made and entered
into by and between the City of Yakima, a Washington municipal corporation (hereafter
"Yakima "); Western Peterbilt, Inc., a Washington corporation (hereafter "Western Peterbilt ");
and Affiliated FM Insurance Company, a Rhode Island corporation (hereafter "Affiliated FM ").
1. Yakima, for and in consideration of the promise to pay Two Hundred Forty Five
Thousand Dollars ($245,000.00) in cash or equivalent funds to the Carney Badley Spellman trust
account within 15 days of mutual execution of this Agreement, the sufficiency of said sum being
hereby acknowledged, hereby releases, and forever discharges Western Peterbilt, its affiliated
entities and/or subsidiaries, Zurich North America, and its member companies, including but not
limited to Zurich Direct Markets, Zurich American Insurance Company, along with any and all
attorneys, adjusters, agents, officers, employees, successors and/or assigns of any of the above -
listed business or legal entities (collectively herein the "Released Parties "), of and from any and
all claims, demands, damages, actions, causes of action, or suits of any kind or nature
whatsoever, arising out of the Incident involving a 2009 Refuse Truck purchased from Western
Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011 (the "Incident "), and
which is the subject of the litigation outlined below. Yakima understands and agrees that this
Agreement includes any unknown injury /damages related to the Incident and/or any condition or
injury hereafter to be discovered.
2. This Agreement forever discharges the Released Parties from any cause of action
or obligation, known or unknown, and whether the same may hereafter arise, develop, be
discovered, including, without limiting the generality of the foregoing, any and all claims and
demands which Yakima has asserted or could have asserted against the Released Parties in
litigation commenced by Yakima in the Superior Court of the State of Washington in and for the
County of Yakima under cause number 12- 2- 03732 -8, which action Yakima agrees to dismiss,
with prejudice, and without award of costs or attorneys' fees to any party.
3. Also in consideration of the above - referenced payment, Yakima does hereby
assign to the Released Parties all of its rights, title, and interest in any causes of action, claim or
demand of any nature arising out of the Incident involving a 2009 Refuse Truck purchased from
Western Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011, and which is
the subject of the litigation commenced by Yakima in the Superior Court of the State of
Washington in and for the County of Yakima under cause number 12 -2- 03732 -8.
4. Also in consideration of Yakima's above - referenced agreement to release and
discharge the Released Partie, the Released Parties hereby release and forever discharge
Yakima from any and all claim, counterclaims, demands, damages, actions, causes of action, or
suits, of any kind and nature whatsoever, arising out of the Incident involving a 2009 Refuse
Truck purchased from Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011,
and which is the subject of the litigation commenced by Yakima in the Superior Court of the
RELEASE AND SETTLEMENT AGREEMENT
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FAC003 0024 pc04ec46hz.004
State of Washington in and for the County of Yakima under cause number 12 -2- 03732 -8. The
Released Parties understand and agree that this Agreement includes any unknown
injury /damages related to the Incident and /or any condition or injury hereafter to be discovered,
and /or any cause of action or obligation, known or unknown, and whether the same may
hereafter arise, develop, be discovered, including, without limiting the generality of the
foregoing, any and all claims and demands which the Released Parties may assert in any action
related to the Incident.
5. Also in consideration of Yakima's above - referenced agreement to release and
discharge the Released Parties, the Released Parties hereby agree to protect, defend, indemnify
and hold harmless Yakima, its elected and appointed officials, employees and agents from any
and all claims, demands, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings
and all judgments, awards, costs and expenses (including attorneys' fees and disbursements)
resulting from or concerning the Incident involving a 2009 Refuse Truck purchased from
Peterbilt in 2009 and alleged t have occurred on or about April 28, 2011, and which is the
subject of the litigation commenced by Yakima in the Superior Court of the State of Washington
in and for the County of Yakima under cause number 12 -2- 03732 -8.
6. Also in consideration of the above - referenced payment, Yakima agrees, prior to
disbursement of settlement funds, to satisfy all subrogated interests, debts and liens for
insurance payments and any and all outstanding liens by, or debts owed to, any source
whatsoever, including but not limited to any liens by insurance companies, financial
institutions, auto dealerships, auto repair shops, or otherwise. In the event that a lienholder
seeks repayment from any of the Released Parties, Yakima agrees to defend, indemnify and
hold the Released Parties harmless from any and all such liens —and the related losses and
liability —and to pay the reasonable attorney fees incurred by the Released Parties in
defending against any such claims and /or legal or other actions relating thereto.
7. Specifically, Yakima will agree not to sell or otherwise dispose of the Refuse
Truck hulk for a reasonable period of time. Western Peterbilt's insurer is requested to conduct
any investigation promptly so til e truck may be disposed of In any event, after November 30,
2014, Yakima is free to dispose of the truck as it sees fit. Yakima will receive the benefit of
any sale for salvage or otherwise. Yakima shall store the truck in the same manner it has been
stored since the date of loss but otherwise assumes no responsibility for its safekeeping.
8. Should any person or entity not a party hereto challenge the validity of this
Agreement, or any term thereof; pursue recovery of monies from the Released Parties, Yakima
shall provide to the Released Parties such cooperation and assistance as the Released Parties
may reasonably request in order to resist such a challenge or defend such a claim. If Yakima
needs to retain counsel for the process referred to in this paragraph, Western Peterbilt will pay
for Yakima's reasonable attorney fees.
9. Yakima agrees and understands that this Agreement, and the giving of
consideration therefore, does not constitute an admission of liability by any one or more of the
Released Parties —which liability is expressly denied —and is given in full settlement and
RELEASE AND SETTLEMENT AGREEMENT
Page 2 of 5
FAC003 0024 pc04ec46hz.004
compromise of disputed claims, present and future, known and unknown, and also is intended
to release all claims for any and all future injury and damage, including effects or
consequences thereof not now known but which may later develop or be discovered, and all
causes of action therefore. Yakima also agrees to cooperate to enforce and implement this
Agreement and its intent. If Yakima needs to retain counsel for the process referred to in this
paragraph, Western Peterbilt will pay for Yakima's reasonable attorney fees.
10. The parties to this Agreement (the "Parties ") hereby declare that they have fully
read and understood the terms of this Agreement and that they voluntarily accept these terms
for the purpose of making a full and final compromise and settlement of any and all claims —
past, present and future, disputed or otherwise, both known and unknown —on account of the
Incident. The Parties also declare that they had the opportunity to review this Agreement with
legal counsel, and have availed themselves of such opportunity. In any case, the Parties
represent that they have fully read and understood all the terms of this Agreement and that
they enter into the Agreement knowingly and willingly, with complete understanding of its
import and effect. The Parties r epresent that they are of sound mind and are fully capable of
entering this Agreement as their own willful and volitional act. The Parties further understand
that the express purpose of this Agreement is to forever bar any further or additional claims of
any kind whatsoever arising out of or in any way connected with, or related to the Incident,
and claimed injury and /or damages related thereto.
11. This Agreement extends to, releases, binds and inures to the benefit of the
Parties and all their heirs, executors, administrators, personal representatives, underwriters,
beneficiaries, attorneys, agents, and assigns.
12. This Agreement is entered into in the State of Washington and shall be
construed in accordance with Washington law. The venue of any action necessary under this
Agreement shall lie in the Superior Court of the State of Washington for Yakima County.
13. The parties to this Agreement agree that if they encounter disagreements about
the contents or enforceability of this Agreement, said disagreements shall be resolved by a
mutually agreeable arbitrator who shall serve as the final arbiter of any such disagreements
and disputes. The arbitrator's ruling shall be final, binding, and non - appealable. Each party
shall pay its own costs and attorney fees if any other party invokes this arbitration clause to
resolve any such disagreements! Each party shall also pay one -half of any fees charged by the
arbitrator for resolving any such( disagreement.
14. This Agreement includes the entire agreement between the parties and may not
be changed except in writing by all the Parties.
15. This Agreement may be executed in counterparts. Each counterpart shall be
deemed an original, all of which taken together shall be one and the same instrument. This
Agreement shall become effective upon execution of a counterpart by each party and delivery
to the other party.
RELEASE AND SETTLEMENT AGREEMENT
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FAC003 0024 pc04ec46hz.004
CITY OF YAKIMA WESTERN PETERBILT, INC.
Ilk tl ,
anager I i l .
ourke City . "k. - g i LJ ► l a ,ro. (.4 tl eill.e , . C ( -
Pme and title
Date: 4 [gt y rint name
I Date: '. / t1. � 20 ( y
AFFILIATED FM INSURANCE
COMPANY
Attest: WA/Ae/14,(4,-
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Print name and title A S o7/ %S wA A - 1 % / f
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Sonya C' ay Tee, City Clerk. ' No y %%, Date: / //Pr . G"
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CITYCONTRACTNO: - - 7a .? �* ✓
RESOLUTION NO: =: - r "` �, C " -
STATE OF WASHINGTON) ‘‘`"`"--
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COUNTY OF YAKIMA )
On this day personally appeared before me, Tony O'Rourke, to me known to be the
City Manager of the City of Yakima, a Washingtomunicipal corporation, and.he executed
the within and foregoing instrument ent and acknowledged said instrument to be the free and ,
voluntary act and deed of the City of Yakima, for the uses and purposes therein mentioned.
I
GIVEN under my hand. nd official seal this day of aloi l f 2014.
�.., ^ ... 9 Printed Name: Tam') vn y A. 12._e, /114 b ,
TAMMYA REGIMBAL l Notary Public in and for °tl�e State of Washington,
Notary Public residing at t^ V1'14 w Il .
1 State of Washington 1
My Commission Expires
.My commission expires: ' 20
Juy 9, 2017 . ,
RELEASE AND. SETTLEMENT' A
Page-4 of 5
PAC003 0024 pc04cc46hz.004
STATE OF tkVvr )
) ss.
COUNTY OF A<Iir
On this day personally appeared before-me !oil ( 1+&,(1.166 , to the knOwri
to be-the ();,FD Of Western Peterbilt, Inc., a Washington corpoittiOn, and
he/she executed the within and foregoing instrument and adknoWledged Said instrument to be
the free and voluntary act and deed of Western Peteibilt, Inc:, for the uses and purposes
therein mentioned.
OIVFN under inyhand and offiCial seal this 11 day, of HOre,h 2014.
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q......!'ooN 41110 44
- 4 .. "rin ect Name
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■/: , dr.xi AR y co - ---- a
r Notary Public in and for the Stat:' of. WaShirigtOn
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P B •••\C) residing at Ke.6A,, u6f1,
i o My comthiSsion expires:
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STATE OF RHODE ISLAND
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COIJNT\POF PrOVI Oen, e
On this day appeared before me, g6 1 De rt 6aune4 to me known
to be the \ itic N t .r , Of Affiliated FM InSurarite Company, a Rhode Island
Corporation, and he/she executed the within and foregoing instrument and acknowledged said
instrument to be the free and voluntary act and deed of Affiliated."FM Insurance Company, for
the uses and purposes therein mentioned.
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GIVEN under my hand and OffiCi.61 seal this CI day Of faCI 2014.
1td . .
Printed Name: 47j7.
Notary Public in d for *State bf Rhode Island,
residing at
my' commission expires:
RELEASE' AND:SETTLEM ENT AGREEMENT
Page 5 of 5
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting of: 4/1/2014
ITEM TITLE: Resolution authorizing a Settlement and Release Agreement
entered into by the City of Yakima and Western Peterbilt, Inc.
to resolve and settle the lawsuit brought by the City of Yakima
against Western Peterbilt, Inc.
•
SUBMITTED BY: Helen A. Harvey, Senior Assistant City Attorney
SUMMARY EXPLANATION:
This matter is on for consideration of a Resolution authorizing and directing the City Manager of
the City of Yakima to execute a Settlement and Release Agreement entered into by the City of
Yakima, Affiliated FM Insurance Company, and Western Peterbilt, Inc. to resolve and settle the
lawsuit brought by the City against Western Peterbilt. The lawsuit was filed in Yakima County
Superior Court No. 12 -2- 03732 -8 entitled City of Yakima v. Western Peterbilt, Inc. The lawsuit
arises out of a fire on April 28, 2011 that destroyed a refuse truck that the City purchased from
Western Peterbilt in June 2009. The City's property insurer, Affiliated FM, paid the City
$130,011 following the fire. However, the City had a $100,000 insurance deductible. The
lawsuit was an effort for the City to recover its $100,000 deductible and for Affiliated FM to
recover the amount it had paid the City. On December 17, 2013, the Court granted the City of
Yakima's Motion for Summary Judgment on Liability. In the allocation of the settlement
proceeds between the City and its insurer, 57% ($2,018.83) of the costs of $3,541.81 are
allocated to Affiliated FM and 43% ($1,522.98) to the City. Subject to City Council approval, the
parties have resolved the lawsuit through a payment from Western Peterbilt of $245,000. Of
that settlement amount, the City will receive $98,477.02, which represents the City's recovery of
its $100,000 deductible minus its allocation of case costs, and the City's insurer Affiliated FM
will receive $142,981.17. All of the attorney fees to file and litigate the claim were paid entirely
by the City's insurer, Affiliated FM, and not by the City.
Resolution: X Ordinance:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Item Budgeted: NA Amount:
Funding Source /Fiscal
Impact:
Strategic Priority: Public Trust and Accountability
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL: _. City Manager
RECOMMENDATION:
Adopt resolution.
ATTACHMENTS:
Description Upload Date Type
0 resolution 3/27/2014 Cover Memo
0 Settlement and Release Agreement 3/20/2014 Backup Material